VAT · Registration & returns VAT registration and VAT201 returns, handled

When must you register for VAT in South Africa?

VAT registration is compulsory once the value of your taxable supplies exceeds R2.3 million in any consecutive 12-month period, or when you have a written contract that will take you past R2.3 million in the next 12 months. This threshold applies from 1 April 2026 — before that it was R1 million.

You must apply within 21 days of exceeding the threshold. Registering late does not make the VAT go away: SARS can hold you liable for output VAT on sales made after the date you should have registered, plus penalties and interest, even though you never charged your customers VAT. If you are anywhere near R2.3 million in turnover, it is worth having us check your figures.

Voluntary VAT registration

You may register voluntarily once your taxable supplies exceed R120 000 in a 12-month period (raised from R50 000 on 1 April 2026). Voluntary registration makes sense if your customers are mostly VAT-registered businesses, if you buy a lot of stock or equipment on which you want to claim input VAT, or if you expect to pass the compulsory threshold soon anyway. It makes less sense if your customers are private individuals who cannot claim the VAT back — your prices effectively rise by 15%. We will run the numbers with you before you decide.

What SARS needs for a VAT registration

• Company registration documents (or your ID if you are a sole proprietor) and the registered representative's details
• Proof of your business address and bank account
• Proof that you have reached the threshold or will reach it — invoices, bank statements, signed contracts
• Income tax registration that is active and up to date

Applications are made on eFiling. SARS frequently asks for further documents or a short verification interview before issuing the VAT number; we prepare you for that so the application does not stall.

VAT returns (VAT201): how often and when

Most small and medium businesses fall into Category A or B and file a VAT201 every two months. Businesses with turnover above R30 million file monthly (Category C), certain farmers file six-monthly (Category D) and some property-letting companies and trusts file annually (Category E).

A VAT201 filed on eFiling is due, together with the payment, by the last business day of the month following the end of the tax period. Returns and payments made manually at a branch are due earlier, by the 25th. Late submission or payment attracts a 10% penalty plus interest, so this is a deadline we never let slip.

Output VAT, input VAT and what you can claim

You charge output VAT at 15% on your taxable sales and claim input VAT on the VAT your suppliers charged you for business purchases — as long as you hold a valid tax invoice. The difference is what you pay to SARS or, if you claimed more than you charged, the refund SARS pays you. Some supplies are zero-rated (certain basic foods, exports, fuel) and others are exempt (residential rent, most financial services), and getting these codes wrong is the most common reason a VAT201 is incorrect. Entertainment, most passenger vehicles and private expenses carry no input claim at all.

Deregistering for VAT

If your taxable turnover falls below the R120 000 voluntary threshold, SARS may notify you that it intends to cancel your registration; you have 80 business days to object if you disagree. You can also apply to deregister when the business closes or your turnover drops below the compulsory threshold. Either way, "exit VAT" is payable on the assets you still hold at cancellation — stock, equipment, vehicles — so deregistration needs planning rather than a quick form.

Why hand VAT to a registered tax practitioner?

VAT is the tax SARS reviews most often, because the refunds are paid out quickly and the rules are easy to get wrong. Our clients' VAT returns are built from reconciled books, checked by registered tax practitioners and filed with a paper trail that stands up to verification. If you are behind, we catch you up; if you are growing, we tell you before you cross the threshold.